Defence and Commerce Minister Ahmad Mukhtar has warned of the possibility that if petrol consumption continues unabated, the government may consider supplying petrol on alternate days.
"The number of vehicles plying in other countries has declined because of the rising petroleum prices, whereas the situation is totally different in Pakistan. Moreover, the excessive use of generators has also pushed up oil consumption to add to the burden of import bill," he told reporters after he made a speech at the opening ceremony of the 10th Pakistan International Footwear Exhibition-'Juft-2008' on Saturday.
Foreign buyers from 18 countries, including Azerbaijan, Bangladesh, Canada, China, Germany, Greece, India, Italy, Kenya, Kuwait, Oman, Malaysia, Poland, Saudi Arabia, Spain, United Arab Emirates, Britain and Uzbekistan.
He said that there was no possibility of immediate decline in the increased trade deficit. "However, the people of Pakistan have to sacrifice by avoiding use of generators and luxury and imported food items reducing the import bill," he said. "The previous regime's policy to promote mobile phone import has also added burden to the national exchequer by $1 billion."
He then said the trade policy for 2008-09 would be announced in the third week of July, which would envisage different measures to encourage country's exports and discourage imports of luxury items. He said the government would redress shoemakers' problems and help them so that exports target could be achieved. He said shoemakers would have to focus on quality manufacturing to bring their products at par with the international standard. "Our shoes exports are less than $100 million although a huge potential exists in the shoe industry needing to be exploited," he added.
He said Prime Minister Yousaf Raza Gillani had given free hand to the Chief of Army Staff for taking any decision on the tribal areas' issue and the matter in this regard was also discussed in detail in national assembly. "The situation in the North-West Frontier Province and the tribal areas is not as bad as is being reported by media.
We will not hesitate to fight for the sake of peace in troubled areas," he added. About withdrawal of the 6 percent research and development facility, he said it was a temporary decision and could be reviewed following improvement in the situation. When asked about the increase in the defence budget, he said the budget enhancement was because of the increasing inflation while soldiers' salaries also had to be raised.
In his speech earlier to his audience, he said the shoe industry had a great potential to enhance exports. "The import of raw material used in the shoe and leather industry has already been declared zero-rated and this sector can actively contribute in boosting the country's exports," he added.
Pakistan Footwear Manufacturers Association Chairman Nasir Anwar said there were 500 fully organised units in the country producing good quality shoes and had started proving their presence in the world market though there was still a long way to go.
"There are a sizeable number of tanneries engaged in producing quality finished leather up to the desired standards of international market. Realising the export potential of value-added products, tanners have invested in the diversification and therefore now numerous leather garments and gloves and shoe factories are annexed to tanneries," he added.
He said that his association had pursued for establishing a footwear development institute to bring the Pakistani industry at par with European countries, designing their own products for the world market. "Although it is an investment of multi-million rupees in the beginning but it will fetch foreign exchange in millions of dollars per annum from footwear exports. The release of sufficient funds for this institute will be beneficial for the industry and the country," he added.
He went on to say, "The government is always keen to create business-friendly environment and hence the footwear industry is aiming high to achieve the export targets. We expect continuing support from the government to further liberalise the trade policy to help the local industries in general and the footwear industry in particular. Footwear manufacturers are subject to a variety of local taxes, which on the one hand increase the cost of exportable products and on the other, much time is wasted in dealing with government departments."
He suggested that only one agency should deal with manufacturers and distribute the share of every department at its end. "Although because of various factors our footwear exports cannot show reasonable increase last year, it would have been worse had we not been granted research and development support of six percent," he said. But he stressed the need for continuity in provision of the 6 percent research and development support in the future.